European shares rose sharply

European shares rose sharply Tuesday, supported by good news coming from some big companies on the continent. Investor sentiment was improved by successive comments from the European Central Bank (ECB) for new incentives and the achievement of a prior agreement between Greece and its creditors on certain elements of the rescue package.
Dutch Randstad shares rose 7% after the second-largest recruitment worldwide reported increased profits and improved its forecast for 2016 German United Internet rose by 2.4% thanks to improved financial results for third quarter . These companies were among the biggest winners in the pan-European FTSEurofirst 300 index, which gained 1.8% during trading after finishing the previous session with a growth of 0.2%.
Market optimism
French shares gained 2.2% after trading ended on Monday with a slight decline of 0.1%. The main German index DAX rose 1.85% and the British FTSE 100 - by 1.7%. "European shares followed the strong winds downwind after good performance on Wall Street the previous day. Investors are showing resilience despite concerns about security in Europe after the attacks in Paris," said told Reuters Lonr Baring, managing director at Capital Wealth Management. "Overall, the macroeconomic environment supported European stocks. ECB's monetary policy will continue to weaken the euro against other major currencies," he added.
Incentives ECBTax return
Expectations for increasing incentives were reinforced by ECB chief economist Peter Pret, who in an interview with Bloomberg confirmed that the Bank's management will discuss new measures in the context of low inflation and increased economic uncertainty. Another positive news is an agreement between the Greek government and creditors on the protection of withdrawal of housing to certain groups of people with delinquent mortgages. This opens the way to implementation of reforms in the banking sector, as a condition for receiving aid. The main index of the Athens Stock Exchange ATG rose by 2.3% as a result of this news.
Shares of companies in the defense sector also rose on expectations of growth in orders amid increased war efforts of France and other countries. Shares in BAE Systems rose 1.5% to Airbus - by 2.8% and those of Meggitt gained 2.5%. Shares of the aviation sector, however, remain under pressure, such as easyJet's declined by 2.5% despite the publication of a positive outlook for business (more info p. 19).

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Shares of luxury companies are also under pressure. Hermes, LVMH and Kering, who rely for a large part of its sales to foreign tourists in France fell by over 1%. "Paris is one of the most important cities in the world in terms of spending on luxury goods. The timing is also important - the weeks before Christmas are the most important period for retailers," said told Reuters Gregor Lavera, fund manager at Roche Brune Asset Management. "These attacks will definitely have long-term negative effect on tourism in France and all sectors related to it. The effect can not be predicted yet," he added.